© Reuters. FILE PHOTO: An order is seen at Shake Shack restaurant at Woodbury Common Premium Outlets in Central Valley, New York, US, February 15, 2022. REUTERS/Andrew Kelly
(Reuters) – The Wall Street Journal reported Sunday, citing people familiar with the matter, that activist investor Engaged Capital is planning a proxy battle for three seats on the board of upscale burger chain Shake Shack (NYSE: NYSE: NYSE).
Including swaps, Engaged owns approximately 6.6% of the chain’s stake, the report said.
The shareholder activist in the US has outlined ways to double the company’s profitability within two years, and believes the burger chain should get rid of its board of directors, which means not all directors are ready to be elected at the same time, according to the report.
“Our stock is up more than 50 percent year-to-date and we are well-positioned to continue to drive shareholder value,” a Shake Shack spokesman said in a statement to Reuters.
“We are executing on our strategic plan and making significant operational and financial progress.”
Engaged has been in talks with company management for more than six months and sent a letter to the board in March detailing its proposal for new directors and other changes to help boost the restaurant chain’s lagging stock price without an agreement, the people told the WSJ.
Engaged Capital did not respond to a request for comment.